Land values continue to skyrocket in the heartland. Values in the Chicago Federal Reserve District rose more in the second quarter than since the 1970s, shows the latest survey of ag bankers. Districtwide, values rose 17% from July 1, 2010, to July 1, 2011, but the increases were uneven across the district’s five states.
Indiana led the district with a 21% increase; values rose 20% in Iowa; 19% in Illinois; 12% in Michigan; and a more modest 8% in Wisconsin. More than 60% of the bankers surveyed expect farmland values to stabilize in the third quarter of 2011.
Agricultural credit conditions were stronger in the second quarter of 2011 relative to a year earlier, as illustrated by a decrease to 2% in the portion of loans having major or severe repayment problems. Repayment rates for non–real estate loans were higher than a year ago, while renewals and extensions of these loans were lower. Funds available for lending were up relative to the second quarter of 2010. Demand for non–real estate loans remained weaker than a year earlier. Interest rates on agricultural operating loans dropped below the lows set six months ago.
- October 2011